The NAV of the company has come down to 151. Still not bad compared to ADW which trades on fair value at the moment. I thought we were going to see a much lower number. Well lets hope that this generates a 50EMA run from what already is a 67% rally from the lows.
Wizard, If you strip out the goodwill figure of R658m , then your NAV per share is 38.8c. That is probably a more realistic figure. My view is that in time like these with BFS's cash problems, the goodwill is worth very little.
i am sorry Wizard? You are comparing BFS' financials against Afdawn? And giving them a clean bill of health? I mean isn't that a bit like comparing an aids victim to a terminal cancer victim and saying don't worry?
Only the local subsidiary is trading in an insolvent position, the group seems to be solvent, but given the ADW mess, one is never certain with these micro-lenders and their fudged accounting. Too aggressive (reckless?) growth across too many territories, massive bad debts in the SA operation (44% loan loss ratio!) and funding and liquidity constraints necessitate an urgent capital injection either via a placing or rights issue. Either way, existing shareholders will be diluted. Management don't inspire with their ongoing destruction of capital and poor allocation decisions. Smart money will certainly avoid this mutt...unless ABSA comes to the rescue with an offer?
The local subsidiary generated 52% of net income and accounted for 44% of gross loans and advances during the past six months - so, it accounts for about half of the business. Attributable NAV for the group net of goodwill (according to these reviewed results), comes to R227m or 38.8cps - so, BFS is solvent if illiquid for now. The African operations are growing with much lower impairment ratios, but lack scale. Additional funding is therefore crucial. I doubt that AIG, the IFC and ABSA would let BFS go bust as the infrastructure to trade in various countries across the continent have been established, but some reconfiguration of the business model and strategy is probably needed as are management changes.That said, I would not invest. Stanlib however did, big time.